EDITOR: | February 3rd, 2014 | 2 Comments

Is Thailand the potash sleeping giant?

| February 03, 2014 | 2 Comments
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In 2012 one mining website claimed that, just behind Russia and Canada in terms of potash deposits, in third place could be Thailand.

ThailandYet precious little has been done about that potential (whether that ranking is true or not, it is clear that sizeable potash resources have been found). Deposits have been known about for decades, and yet Thailand is still a potash importer. That may not matter too much in the case of some countries, but Thailand is an agricultural powerhouse. It is the world’s No. 1 exporter of rice (6.5 million tonnes a year) and 49% of Thai workers earn their living from agriculture. More than a quarter of its land area is classed as arable (and it‘s the 51st largest country in total area, as well as the 20th most populous with 64 million people). Its GDP, at around $600 billion, is the second largest in Southeast Asia (after Indonesia).

If there is to be potash production of any significance in the country, then there will also be geopolitical implications in the form of China, which is seeking supplies in Southeast Asia. Already Chinese interests have applied to explore for potash in Thailand (and they are deeply involved in potash production next door in Laos.)

The question of Thailand has come to the surface with the news that an Australian junior hitherto interested mainly in uranium in Western Australia has decided to diversify into potash — and into Thailand. FYI Resources (ASX:FYI) has, as reported here on Investor Intel last week, lodged applications for potash exploration on the Khorat Plateau, in the country’s northeast. FYI has described the area as having “proven but heavily under-explored” deposits; they were discovered by drilling in the 1970s. The company argues that the ground may give FYI an advantage over many other potash projects in that, apart from being high grade, they are found at shallow depths, so limiting the capital costs of development.

Coincidentally, Ken Research of New Delhi, India, just last week released a report on Thailand’s fertilizer sector.

They were sure that consumption of fertilizers in the country is bound to grow in Thailand due to several factors: these include diversification of crop production, prevailing climatic conditions, credit availability (farmers have easy access to credit), economies of fertilizer use and fertilizer distribution facilities. “Currently, some of the challenges faced by the fertilizer industry in Thailand include low fertilizer application rate, imbalanced fertilizer use and deficiency of secondary and micro nutrients,” the report said. “While nitrogen fertilizers have continued to be the largest segment with a share of 58.4% in 2012, it is the potash fertilizer segment that has grown fastest in the country with the government promoting balance fertilization among farmers.”

Potash use has grown between 2006 and 2012 at a compound average growth rate of 11.5%.

The problem is that companies have been trying to get into potash exploration and production for more than a decade, but generally made little progress due to both protests from farmers in areas proposed for mining and government restrictions. As long ago as 2004 China Mingda Potash applied for a prospecting licence (but, again, this company made little progress). A state-owned Chinese company had looked at raising $300 million for another project. It was reported that year that a Canadian company had already spent $25 million on potash exploration in Thailand.

In 2012 there were reports that Asia Pacific Potash Corp, a subsidiary of Italian-Thai Development Public Company Ltd, had been given permits for potash exploration on 119 sq km of land in the Udon Thani province.

Asean Potash Mining — incorporated as early as 1981 — had been given permits to survey a site in Chaiyaphum province. By 2012 the company found carnallite lying at a very shallow depth of 110-160m with an average seam thickness of 25m.

But these projects ended up being frozen by the country’s mines department after local opposition.

We’ll have to wait and see whether Thailand manages to get itself a potash industry this time around.


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Editor:

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Comments

  • J. Best

    This is very interesting. It would seem that the intense agricultural powerhouse of Thailand is in opposition of land use for mining. It seems inevitable that the government will need to find a way to make it work, demand will dictate the need.

    February 3, 2014 - 9:51 AM

  • john steele

    I have lived in Thailand for 30 years (despite being a Canadian by birth. I came to Thailand to work with a 6 man team from Canada to manage an inventory of the minerals in Thailand. One of the main objectives was potash. At that time, Thailand joined the flegling ASEAN and contributed the major Carlinite potash deposit as its contribution to ASEAN. It is expected that this deposit will go into production within 2 to 3 years but it needs additional expertise. As well there at least 5 other potash deposits ready to move forward (3 large and at least 2 smaller ones). We need expertise and financial help in Thailand to make this work

    June 5, 2016 - 12:40 AM

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